Insurance and reinsurance are highly regulated businesses, where firms have to hold reserves commensurate with the risk they are taking. While the models have limitations, they are good enough to evaluate capital requirement.
In the last 20 years, investors have become a welcome source of risk capital which was driven by (a) the increasing need of insurance coverage relative to existing loss-paying capacity within the system (I.e. Need for extra capital to support the growing market) and (b) the fact that insurers and reinsurers seek to diversify their own insurance coverage, By minimizing credit risk.
In the last 20 years, investors have become a welcome source of risk capital which was driven by (a) the increasing need of insurance coverage relative to existing loss-paying capacity within the system (I.e. Need for extra capital to support the growing market) and (b) the fact that insurers and reinsurers seek to diversify their own insurance coverage, By minimizing credit risk.